What BFCSA Does...

BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide. Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years. For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams. She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.

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BFCSA Blog

Led by award-winning consumer advocate Denise Brailey, BFCSA (Inc) are a group of people who are concerned about the appalling growth of Loan Fraud around the world. BFCSA (Inc) is a not for profit organisation in the spirit of global community concern and justice.

Graeme Samuel ‘bewildered’ by finance companies’ poor behaviour
The Australian 12:00am September 22, 2018
Michael Roddan
Former competition tsar Graeme Samuel has hit out at the “completely unacceptable” behaviour of some of Australia’s bi

ASIC under fire: Can a change of the guard fix regulator’s image?
The Australian 12:00am September 22, 2018
Ben Butler
Hard and fast. That’s how one of the Australian Securities & Investments Commission’s new commissioners took on the

ASIC reviews penalties after Hayne shaming
Australian Financial Review Sep 21 2018 11:00 PM
John Kehoe
EXCLUSIVE The corporate regulator has launched an internal review into how it negotiates settlements and the size of monetary pena

How reef funds went from $5 million to nearly $500 million in five days
Sydney Morning Herald 21 September 2018 12:00am
Carrie Fellner & Peter Hannam
EXCLUSIVE Just days before the Great Barrier Reef Foundation received a controv

Hayne shines a light on bargain basement penalties
Australian Financial Review Sep 20 2018 7:31 PM
James Frost, Misa Han
The corporate regulator's failure to issue major companies with fines of any consequence was again highlighted at the

One in five interest-only borrowers could run into mortgage repayment arrears: UBS
Australian Financial Review Sep 21 2018 12:16 AM
Su-Lin Tan
One in five interest-only loan borrowers will struggle to make mortgage repayments when their in

Banking royal commission report will crimp mortgage credit: Citi and UBS
Australian Financial ReviewSep 20 2018 11:00 PM
James Eyers
Banking analysts are braced for the interim report of the financial services royal commission to prompt a

RBA’s Chris Kent explains how banks make money ... literally
The Australian 12:00am September 20, 2018
Adam Creighton
Banking is a licence to create money out of thin air, the Reserve Bank says, exploding the myth that banks make loans by

7.30 Report’s “House of Cards” (Part 2) does the credit crackdown
Macro Business11:15 am on December 12, 2018
Leith van Onselen
ABC 7.30 Report last night aired the second of a three part special on Australia’s budding housing bust, which is well worth watching.
The episode focussed on how the credit crackdown is putting heat on buyers and developers.
The episode first features several quotes about systemic mortgage fraud and loose lending:
MS ROWENA ORR, QC, SENIOR COUNSEL ASSISTING: Multiple bank employees across multiple branches in the Greater Western Sydney area were accepting false documents in support of loan applications.
ANTHONY WALDRON, NATIONAL AUSTRALIA BANK LIMITED: People did step outside their responsible lending guidelines.
ROWENA ORR: There were unsuitable loans. There was false documentation.
KAREN COX, FINANCIAL RIGHTS LEGAL CENTRE: Just really inappropriate lending.
We don’t resile from anything that the royal commission has identified…
It then featured a short discussion...

Value of new housing loans dive in September quarter
The Australian 11:00pm December 12, 2018
Samantha Bailey
The value of new housing loans in Australia plunged 7.4 per cent to $89.2 billion for the September quarter, according to data released by the prudential regulator.
The quarterly ADI report, which details commercial property exposures, residential property exposures and new housing loan approvals, found that impaired assets and past due items lifted 5.4 per cent to $27.6bn for the period.
The total value of domestic housing loans on the books of authorised deposit-taking institutions rose 5.4 per cent on the previous year to $1.6 trillion, APRA said.
It comes amid predictions the domestic housing market will continue its downturn next year, and it could worsen if economic growth slows and Australia’s unemployment rate rises.
Chris Bedingfield, joint managing director of Quay Global Investors, said on Monday the property market downturn could last...

Shadow banks grab market share with big borrowing savings for property buyers
Australian Financial Review 12 Dec 2018 3:19 PM
Duncan Hughes
Shadow banks are grabbing property market share from the majors with rates nearly 80 basis points cheaper and faster loan approval, analysis of rates and conditions shows.
The banks, which are not authorised as deposit-taking institutions, are growing at 2½ times than their rivals but still account for only 9.5 per cent of the mortgage market, according to analysis.
The regulation-light sector has avoided most of the consumer fall-out from the banking royal commission and restrictions imposed on the majors by prudential regulators, such as caps on lending and pressure to intensify scrutiny of borrowers' income and spending.
They have also shown a greater risk appetite by continuing to target low-documentation borrowers, who are typically self-employed or small business owners that do not have access to pay slip...

Westpac suffers a first strike at AGM
Australian Financial Review 12 Dec 2018 7:50 PM
James Eyers
Westpac Banking Corp chairman Lindsay Maxsted has defended the modest reduction in short-term bonuses for senior executives that triggered a massive protest vote and embarrassing first strike by investors at its annual meeting, saying it wouldn't have been fair to impose bigger pay cuts because many problems uncovered by the royal commission related to other banks.
With the royal commission final report due with the government in six weeks, Mr Maxsted said the inquiry's narrow terms of reference – requiring it to focus on misconduct – would make it difficult for Commissioner Kenneth Hayne to "form a view on overall culture" in the banking sector.
During its Perth AGM, which saw 64.2 per cent of votes cast against the remuneration report – the biggest vote against a widely-held, large cap company – Mr...

WHAT A LOAD OF RUBBISH FROM APRA
APRA will no longer tolerate poor performing super
Australian Financial Review12 Dec 2018 8:32 PM
Chanticleer (Tony Boyd)
For the second time in a week the Australian Prudential Regulation Authority has given observers reason to think it can be a tough regulator.
The release on Wednesday of a package of new and enhanced prudential requirements for superannuation funds showed that APRA can be tougher without waiting for government legislation.
That is a good thing given the complete dysfunction in Canberra when it comes to passing legislation that would actually serve to strengthen consumer protection and lift the returns achieved by super fund members.
The amount of super-related legislation lying dormant in Canberra and unlikely to see the light of day before the next federal election is embarrassing. Chanticleer has lost count of the number of financial services ministers or assistant treasurers over the...

Documents reveal knowledge of ANZ's rate-rigging program went right to the top
ABC News13 December 2018
Elise Worthington, Elysse Morgan
Memo to ASIC: OMISSION IS A CRIME
ANZ chief executive Shayne Elliott and other senior managers have been implicated for the first time in the interest rate rigging scandal that rocked Australia's financial system.
The details are outlined in a tranche of court documents obtained by the ABC that were quietly filed by the corporate regulator shortly before a settlement was reached.
ANZ was fined $50 million last year after it admitted that it had attempted to manipulate the Bank Bill Swap rate (BBSW) on 10 occasions between 2010 to 2012.
At the time, the BBSW was a key interest rate set daily by Australia's biggest banks and influenced how much consumers paid for mortgages, personal loans, credit cards and other forms of debt.
The bank maintained that only "a small...

Private business and wealthy individuals not ready for increased ATO scrutiny
Australian Financial Review12 Dec 2018 4:20 PM
Tom McIlroy
Some of Australia's richest people and cashed-up private businesses aren't ready for personalised scrutiny from the ATO because they lack specialist advisers and policies to address tax risk issues.
As part of efforts to make sure high-wealth individuals and their associated entities pay the right amount of tax, the Tax Office is working with about 1200 private groups to avoid filing mistakes or poor performance before corrections are needed.
Accountancy and business advisory firm BDO has warned some groups and rich listers – including individuals with net wealth of more than $10 million and private companies with turnover of more than $10 million – don't have the right documentation and tax policies in place, despite early intervention by the ATO being cheaper than mistakes and costly audits.
BDO tax partner...

“Severe Collapse” of Home Prices Might Trigger a “Financial-Institution Crisis” in Australia: OECD Frets about the Banks
Wolf StreetDec 10, 2018
Wolf Richter
“The authorities should prepare contingency plans.” The big four banks are too exposed to mortgages. Even if the banks don’t topple, the economy will get hit hard.
In its latest report on Australia, the OECD focuses to a disturbing extend on housing, household debt, what the current housing downturn might do to the otherwise healthy economy, and what the risks are that this housing downturn will lead to a financial crisis for the big four Australian banks, an eventuality that it says “authorities” should make “contingency plans” for.
The big four banks are huge in relation to the Australian stock market and the overall economy: Their combined market capitalization, at A$341 billion, even after today’s sell-off following the OECD report – accounts for 26% of Australia’s total...

IOOF shocked by APRA move on Chris Kelaher and George Venardos, vows to reset relationship
Australian Financial Review 10 Dec 2018 11:00 PM
James Frost, Misa Han
IOOF's acting chairman Allan Griffiths says the diversified financial services giant was shocked by APRA's move to disqualify its chief executive Chris Kelaher and chairman George Venardos from acting as superannuation guardians and has vowed to reset the relationship with the regulator.
On Monday morning Mr Kelaher and Mr Venardos were stood aside on full pay with non-executive director Mr Griffiths announced as acting chairman and general manager of wealth management Renato Mota elevated to acting CEO.
"Up until Thursday of last week we were acting constructively with APRA ... we were taken aback substantially," Mr Griffiths told The Australian Financial Review.
IOOF described the proceedings as misconceived in a statement to the ASX. When asked to expand on this, Mr Griffiths said:...

NAB launches borrower blacklist in new credit crackdown
Australian Financial Review 10 Dec 2018 4:10 PM
Duncan Hughes
NAB has launched a blacklist of phrases and explanations no longer acceptable for borrowers seeking personal, household or residential investment loans as the bank tightens credit card lending and reviews minimum living expenses used for loan applications.
The nation's third largest mortgage lender is introducing minimum mandatory responses from borrowers about why they need to borrow, their personal and financial circumstances and how they intend to repay.
Bank staff and brokers, acting as intermediaries between borrowers and the bank, will no longer be able to respond to a written request for information from an applicant about expenses with "$0", or use commentary such as "agreed with customer", or "spoke to customer" on loan applications.
Other banned phrases, which fail to provide any reasons relating to expenses, include "customer conversation hold", "refer to...

There’s an ‘idiotic’ hole in the Australian Financial Complaints Authority’s bucket
The Australian 4:58pm December 10, 2018
James Kirby
As the royal commission reviews the failings of mortgage brokers, a fresh loophole in the new consumer protection regime allows hundreds of mortgage brokers across the market to operate outside the system. An estimated 230 mortgage broking firms and individual operators are operating beyond the financial complaints safety net in yet another slab of evidence the regulatory system is riddled with gaps that leave the consumer exposed.
The new Australian Financial Complaints Authority, which opened its doors just earlier this year is meant to monitor bad behaviour across the credit sector — but the loophole has forced AFCA’s inaugural CEO David Locke to publish the full list of recalcitrant mortgage brokers in a clear effort to name and shame the sector.
However the plea from the regulator to get mortgage brokers...

How Nicholas Moore built
Macquarie Bank into a $2.6b-
profit powerhouse
https://www.afr.com/brand/afr-magazine/how-nicholas-moore-built-macquarie-bank-into-a-26billionprofit-powerhouse-20180814-h13yea
David Gonski thinks Nicholas Moore is a frustrated architect. That was the impression Gonski gained after Moore led him on a private tour in 2015 of Macquarie’s new headquarters inside the historic Commonwealth Bank building in Sydney’s Martin Place. Moore had taken a leading role in the building’s design and whereas most chief executives would have placed their office on a corner, facing outwards across bustling Martin Place, Moore wanted to look inwards, across the central atrium, at the Macquarie worker bees above and below. With the press of a button he can frost his glass walls whenever privacy is needed.
That Moore’s office looks inwards is no mere architectural obsession. His penchant for keeping an eye over every part of Macquarie’s sprawling global business, and his never-ending fascination with dealmaking, are demonstrated by his practice of regularly allocating...

Banks hoodwinked interest-only customers
Australian Financial Review11 Dec 2018 12:30 AM
James Frost
The big four banks used the cover of regulatory intervention to lift rates on interest-only loans and extract an additional billion dollars in profit, the Australian Competition and Consumer Commission has found.
A report from the ACCC to be released on Tuesday will stop short of accusing the banks of colluding, however, it will describe the big four's decision to raise rates in June 2017 in unison as an example of "synchronised pricing" typical of the sector.
The competition watchdog says the behaviour was aided and abetted by the "oligopoly market structure" that has the big four banks capture 80 per cent of the Australian marketplace. It says ANZ, which was the first to lift rates, did so expecting the others to fall in behind.
"We consider that the interest-only benchmark created a focal point for the...

Loan squeeze sparks call for six-week auction campaigns
Australian Financial Review 09 Dec 2018 4:44 PM
Nick Lenaghan
Loans are taking so long to approve that the typical four-week sales campaign is now too short and should be extended, says a leading property market analyst.
The tightening loan approval process is taking its toll on home auction markets with Sydney clearances on Saturday expected to fall below 40 per cent and Melbourne to hit the low 40 per cent range.
With less than half the number of listed auctions reported, Sydney's clearance rate was at 44.4 per cent on preliminary results from Domain on Sunday.
Melbourne was at 43.9 per cent. Last week, Sydney's final clearance rate came in at 35.8 per cent with a similar number of auctions listed as this week. Melbourne ended with a 40.6 per cent clearance.
Veteran analyst Louis Christopher, from SQM Research, said agents...

OECD: House price risks to economy but 'soft landing' ahead
Australian Financial Review10 Dec 2018 6:00 AM
John Kehoe
The weakening property market is a risk to the economy so economic policymakers must stand ready to respond, but a "soft landing" in home prices is the most likely outcome, the Organisation for Economic Co-operation and Development has advised in a detailed review of Australia.
The OECD forecast good economic growth averaging 3 per cent this year and in 2019 and pointed to rising household debt at a time of softening real estate prices in Sydney and Melbourne as the main source of vulnerability.
"House prices have fallen, although only gradually since late last year; the current trajectory would suggest a soft landing, but some risk of a hard landing remains," the OECD said in a report.
"A direct hit to the financial sector from a wave of mortgage defaults is...

Commonwealth Bank failed to notify police over 'blatant larceny'
Australian Financial Review 09 Dec 2018 11:00 PM
David Marin-Guzman
The Commonwealth Bank fired a personal lender for stealing more than $3,000 in cash from a Sydney branch but failed to report the matter to police, according to a new unfair dismissal ruling.
Fair Work Commissioner Ian Cambridge, while upholding the sacking, said he was "surprised" the bank did not notify police given security camera footage of the "blatant larceny" and had instead paid the employee three week's salary in lieu of notice.
The bank launched an investigation into its Earlwood branch in western Sydney in February this year after a third party contractor received an anonymous tip-off about activities going at the branch.
Investigators uncovered CCTV footage from December 17, 2017 that showed a personal lender dividing a bound bundle of $100 notes into one larger and one smaller portion...

Banks see rush of unfair dismissal rulings as employees face 'new level of risk'
Australian Financial Review 09 Dec 2018 11:00 PM
David Marin-Guzman
The Fair Work Commission has warned of a "new level of risk" for staff in financial institutions that could mean the end of their careers as the sector is hit by a rush of unfair dismissal rulings.
Industry sources say unfair dismissal decisions for banks, once a rarity, have surged as organisations refused to allow quiet resignations in cases of misconduct and will no longer settle related unfair dismissal claims.
The strict industry approach is in response to the Australian Banking Association's new "conduct background check" protocol ushered in last year to stop rogue financial advisers in the sector shuffling from one job to the next.
The protocol, covering the big four banks, Macquarie, AMP and Suncorp, requires companies to share reasons for why an employee...

ASIC deputy chair Karen Chester targets super shake-up
Australian Financial Review 09 Dec 2018 11:00 PM
Patrick Durkin
The Treasurer's hand-picked regulator plans to end the finger pointingabout who is policing the $2.7 trillion super sector.
Karen Chester, one of the corporate regulator's fiercest critics, was chosen by Treasurer Josh Frydenberg on Friday to join the Australian Securities and Investments Commission to help lead the response to the Hayne royal commission and put a greater focus on super and competition in financial services.
Confusion reigns over enforcement of the super sector with ASIC telling the royal commission that APRA had primary responsibility.
However APRA admitted they had never brought a civil case against superannuation trustees, with Friday's case against IOOF executives their first major enforcement action.
Ms Chester believes it is in ASIC's DNA to be the frontline enforcer. Data analytics are expected to be her key weapon to identify...

AustralianSuper chief Ian Silk takes aim at banker bonuses
The Australian 11:00pm December 9, 2018
Richard Gluyas
The nation’s biggest superannuation fund will vote against the ­remuneration reports of three major banks in the coming annual-meeting season, increasing the likelihood of first strikes against Westpac, National Australia Bank and ANZ.
Amid a growing backlash against misconduct highlighted by the financial services royal commission, AustralianSuper chief executive Ian Silk said he was disappointed by the approach to executive pay taken by the boards of the three banks.
“That the banks are proposing paying a bonus to executives this year indicates that the thresholds for ‘at risk’ pay are too low,” Mr Silk said.
“Low thresholds effectively make ‘at risk’ payments part of fixed pay.
“AustralianSuper wants to see appropriate thresholds which clearly demonstrate how any payment above a fixed pay component is linked to long-term value creation.”
A first strike is...

Mortgage brokers launch blitz against industry reform
Sydney Morning Herald 10 December 2018 12:15am
Nick Toscano
Australia’s mortgage broking industry will fund a nationwide advertising blitz to push back against the threat of tough new regulations in the wake of the financial services royal commission.
Commissioner Kenneth Hayne’s interim report sparked concerns in the industry that mortgage broker payments would be overhauled, particularly around special commissions paid by banks to brokers for referring loans to them.
The report said so-called upfront and trailing commissions, which depended on the size and length of the loan, increased the likelihood of misconduct and risky borrowing.
“What is plain ... is that value-and volume-based remuneration for intermediaries in the home loan industry has been an important contributor to misconduct and conduct falling short of community standards and expectations,” Hayne's report said.
Mortgage brokers, in response, will embark on the large-scale advertising drive across print,...

Curtain has come down far too soon on banking inquiry
Adele Ferguson
1 December 2018
“We will adjourn.” With those three words, Kenneth Hayne bowed and drew the final curtain down on the royal commission into misconduct in the banking superannuation and financial services industry.
If there was a sense of disquiet it was due to the topics and institutions that had been missed from this short yet headline-grabbing event.
In the 68 hearing days, covering 134 witnesses and thousands of exhibits we have seen dishonesty and entrenched conflicts of interest. We have watched the flawed, arrogant – and sometimes contemptuous - leaders that run the nation's biggest financial institutions.
We have had rampant, institutionalised corruption on full display.
Regulators negotiating soft outcomes and compensation delayed for years, have been common themes.
The royal commission has already had a profound impact on these organisations.
It hasn’t gone far enough...

As the banking royal commission’s hearings conclude, it can be revealed the banks have made $88 million in tax-deductable donations to avoid major penalties.
By Michael West.
Bank penalties disguised as charitable donations
Here is a troubling fact that has largely escaped scrutiny during the banking royal commission: for the past 10 years, rather than being penalised for breaches, it appears the banks have been receiving tax deductions for their crimes and misdemeanours. Instead of paying fines, they have been making donations to charities – a “no fault” solution to dealing with financial offences. And in more than 70 per cent of cases, there is no record of where this money has gone.
The Australian Securities and Investments Commission’s (ASIC) decade of deals with the banks began in March 2009 when its then chairman, Tony D’Aloisio, struck an “enforceable undertaking” (EU) agreement with ANZ Banking Group.
ANZ had been a key...

New ASIC deputy chair Karen Chester ready for fight
The Australian 9:00am December 7, 2018
Michael Roddan
Karen Chester has been named a new deputy chair of the corporate watchdog, replacing outgoing commissioner Peter Kell in an appointment that is expected to bring a voice for tougher enforcement and a focus on competition and consumer outcomes to the nation’s top financial regulator.
It’s a further strengthening of the ranks of the Australian Securities and Investments Commission, which has been pummelled at the Hayne royal commission and by politicians and consumer groups for failing to tackle misconduct in the banking and financial services sectors.
Currently deputy chair of the Productivity Commission, Ms Chester conducted a thorough review of ASIC’s enforcement failures in 2015.
ASIC has been gearing up to take a more aggressive footing in its dealing with rogue financial outfits with the appointment of its chief litigator Daniel Crennan...

Shadow banks two-and-a-half times more likely to approve loans than big four
Australian Financial Review07 Dec 2018 5:40 PM
Duncan Hughes
Mortgage borrowers are two-and-a-half times more likely to have a home loan approved by a regulation-lite shadow bank than a big four competitor, analysis reveals.
A yawning gap between the sectors has been widening since February when the banking royal commission put the spotlight on authorised deposit-taking institution (ADI) lending practices, particularly for the big four lenders.
But shadow, or non-banks have been gaining market share since early 2016 when macro-prudential controls imposed by regulators targeted lending standards in a successful bid to ease pressure during the property boom.
Two sets of data – commissioned by AFR Weekend – reveal how shadow banks have been eroding ADI market share with more competitive products and higher numbers of loan approvals.
"Shadow banks have had lighter regulation and the more favourable...

Investors want IOOF cleanout after APRA's shock move
Australian Financial Review07 Dec 2018 10:31 PM
Misa Han
Investors are calling for the IOOF board and management to go after an emboldened prudential regulator took the wealth giant to court for allegedly breaking superannuation laws.
The shock move, just months after the Australian Prudential Regulation Authority was lambasted for failing to police the superannuation sector at the Hayne royal commission, saw IOOF shares plunge by more than a third and left its deal to take over ANZ's wealth arm hanging by a thread.
Three years after it first raised the alarm with IOOF over widespread conflicts of interest, the Australian Prudential Regulation Authority has asked the Federal Court to disqualify the group's chief executive Chris Kelaher, chairman George Venardos and three senior executives from sitting on super fund boards.
Fund manager Reece Birtles, who manages money for IOOF's major shareholder Legg...